Free-riding a la carte

A study shows most people would have paid their share of the bill, given the choice. And yet in social settings, splitting remains the default option

The difficulties involved in splitting a restaurant bill are the stuff of legend or, at least, the stuff of Life, the Universe and Everything by Douglas Adams. Adams introduced the concept of Bistromathics and the Bistromathic Drive: the mathematics generated by people’s odd behaviour in restaurants is apparently so powerful and strange, he declared, that it can fling a starship across a galaxy in seconds.

Bistromathics emerge from the interaction of two powerful forces in social science: freeriding and social pressure. Eating out is a social occasion and your behaviour will affect how others see you. Yet the opportunity for freeriding is obvious: if six diners split the bill equally, the additional cost to any one diner of ordering that £12 starter will be just £2, with his companions picking up the balance. The split-the-bill rule offers an excellent opportunity to try the fancier options at little extra cost. Of course everyone else is likely to reach the same conclusion – but then they’d be a fool to do otherwise.

Do people really freeride in this way? A large number of laboratory experiments, typically involving students sitting at computers and interacting anonymously, have found that we freeride less than textbook economic theory would predict. We care about other people, it seems – either about their wellbeing or what they think of us.

But there’s an alternative explanation for this curious outbreak of human decency: perhaps people are just confused by the laboratory setting and the laboratory games. There’s some evidence, for instance, that people in these free-rider games start to take advantage of each other after a few practice runs.

In 2004, three researchers, Uri Gneezy, Ernan Haruvy and Hadas Yafe published an intriguing study in The Economic Journal. Gneezy and his colleagues had conducted an experiment in a real restaurant, in Haifa, Israel, inviting groups of six diners to order food – but giving them different systems for settling the bill.

The idea wasn’t to simulate the real restaurant experience, when one dines with friends and can expect social consequences for good or bad behaviour: the researchers had invited complete strangers to eat together, ostensibly for the purposes of researching the effect of food on emotions.

What was the point of creating such an odd dining experience? Instead of trying to understand how people behave in restaurants, the researchers were trying to use the restaurant as a better kind of laboratory. Laboratories can be confusing, but everybody understands that if you’re sitting in a restaurant and you’ll be splitting the bill, you have an incentive to order the lobster.

Diners were, at random, offered three different billing rules: split-the-bill, pay-your-share, or on-the-house. They were also asked to order food by writing their choices down, without discussion. This odd request was made less odd by the fact that they were all filling in questionnaires at the time.

Homo economicus immediately emerged: diners ordered, on average, 37 shekels worth of food when paying their own way, 51 shekels when splitting the bill, and 82 shekels when the experimenter picked up the tab for everyone. (A small follow-up experiment hinted that people splitting the bill six ways behave similarly to those paying one-sixth of their own bill.)

We freeride in restaurants, then – at least, we freeride in the odd circumstance of having lunch with total strangers and filling in questionnaires. But there’s a twist to this: the experimenters asked, out of curiosity, whether people would prefer to split the bill or pay their share. Most people would have paid their share, given the choice. And yet in social settings, splitting the bill remains the default option. Is there a deeper or more fascinating subject than Bistromathics?

8 Comments

Steve says:

My experience is that people don’t choose to split the bill on the basis of a preference for freeriding.

They do it because they don’t want to have to remember what they had, find or remember what it cost, add all that up, split the price of 4 bottles of wine between one person who had one glass, and five people who can’t remember how many glasses they had, add tip, and then deal with the fact that everyone rounds what they owe on the basis of what change they have. Neither do they want to hand 6 cards to the waiter with detailed instructions what to put on each.

So it’s not much surprise to me that, when someone else offers to do the sums for them, they express a preference for preventing a bunch of strangers from freeriding.

I also wonder whether there’s value in splitting the bill among friends precisely *because* it encourages everyone to order the lobster. Effectively it’s a pact among everyone to treat themselves (and each other).

Come to thing of it, it may just be that economists ignore what Adams didn’t: making agreements and performing arithmetic are both quite expensive operations, at least to people who are spending disposable income.

I think that these studies overlook the effect of the social elements in this decision beyond the negative stereotypes of free-riding.

For instance if a party choses to each pay their share, this requires a number of actions that are time consuming, error prone and sometime awkward. If somebody forgets that they ordered a starter or a second drink, there is confrontation to resolve. If people don’t tip or correctly account for tax, others are pressurized into covering for them also leading to negative emotions. Finally the added hassle of working out shares and collecting the money can stop enjoyable conversation at the end of a meal.

A final thing to consider is that choosing to pay your share suggests that one or more members of a party are less able to pay their way, there is certainly a negativity attached to the one person in a group who choses to complicate an otherwise simple bill split.

This is similar to the prisoner’s dilemna, where ordering the lobster=defecting. The game theoretic analysis of this is that you should only order the lobster (‘freeride’) if you won’t eat dinner with these people again (non-iterated prisoners dilemna).

In my experience, the decision to split the bill or pay your share comes at the end of the meal, when the bill arrives, rather than at the start – that means you also have to take a bet on whether having the lobster is in your best interest. It may come down to your ability to persuade the other diners to act against their own best interest…

As an undergraduate I worked as a waiter and on one occasion a party came in to celebrate the birthday of the girl I was sweet on. I wrote he order on the back of the pad and gave the kitchen the wink and so when they came to carve up the bill I said “..I’ve covered Sarah’s meal since it’s her birthday” (how smooth!) BUT the guy who was working out the cost *almost* insisted that the cost of seven meals be divided amongst the eight of them – clearly his desire no not see one of their number “get away with it” vastly outweighed his worry about what the rest of the party thought of him.